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Unrealized Losses Trading and Available-for-Sale Securities

1. Unruh Corp. began operations in 2007. An analysis of Unruh's equity securities portfolio acquired in 2007 shows the following totals at December 31, 2007 for trading and available-for-sale securities:

Trading Available-for-Sale
Securities Securities

Aggregate cost $90,000 $110,000

Aggregate fair value 65,000 95,000

What amount should Unruh report in its 2007 income statement for unrealized holding loss?

a. $40,000.
b. $10,000.
c. $15,000.
d. $25,000

Solution Preview

The difference between the cost basis and the fair market value on trading securities is recorded on the income statement as an unrealized gain or loss. ...

Solution Summary

This solution discusses how unrealized losses on trading and available-for-sale securities are reported for financial reporting purposes.

$2.19